International brands and buyers’ business practice are “questioned” amid cancellation of orders putting vast RMG workers in immense trouble though owners invested a lot in post-Rana Plaza incident bringing massive reforms. Bangladesh, the top garment exporter in the world after China, is heavily dependent on European and American orders. Bangladesh government and industry leaders started raising the issue of cancellation of orders by the international brands and buyers at various levels amid coronavirus crisis. Foreign Minister Dr AK Abdul Momen pointed out that orders worth $3.18 billion have already been cancelled or suspended by international brands and buyers, affecting 1,150 factories and 2.28 million workers. “Such approach from the brands isn’t acceptable which pushed workers towards uncertainty. Factories in Bangladesh have invested a lot in the last six years,” Dr Nazneen Ahmed, Senior Research Fellow at Bangladesh Institute of Development Studies (BIDS), told UNB. She said garment factories in Bangladesh made those investment for getting better purchase orders from the global brands and buyers. “But, at this crisis moment, brands cancelled orders or are unwilling to pay against orders and produced products or offering partial payment. This is unethical,” Dr Nazneen said reminding the efforts by the hard-working workers. She also reminded the brands that all their wealth is built on tireless efforts of millions of workers and urged them not to betray them, when they need their support the most. “We expect that the international brands will maintain their business ethics. Order cancellations, partial payments or non-payment against the ready products for shipments are appearing as threats to long-term business relationship. It’s inhumane and unethical,” Dr Nazneen said.
UK Based Retailers
British lawmaker Rushanara Ali has written to the Chancellor and the Secretary of State for International Trade urging them to lead efforts to protect global trade and supply chains. The letter highlighted the damage caused by multinational Western firms backing out of business contracts and impacts on Bangladesh. It included the example of the Readymade Garments (RMG) industry in Bangladesh, where $3.7 billion of orders have been cancelled already. Nearly £2.4 billion of these contracts are from UK-based retailers, including ASDA, New Look, Edinburgh Woollen Mills, Peacocks, Sports Direct and Urban Outfitters. “In addition, Bangladesh is the world’s largest producer of garments and textiles after China. If this supply chain collapses, then the world’s capacity to produce PPE will be damaged,” said Rushanara Ali, MP. “The UK must lead efforts to ensure that global trade and supply chains are protected,” she said. Rushanara called on the UK government to take all the necessary steps to support those British companies that are struggling to stay afloat, so they are able to fulfil their obligations to suppliers. “In doing so, this will protect those who work to supply our UK high-street goods.” She said it is morally reprehensible for big multinational firms, who can afford to pay, to back out of their contracts. “In doing so, they’re putting millions of workers and their families at risk of starvation. Their actions are potentially de-stabilising countries and damaging the prospect of recovery from a global recession,” said Rushanara Ali. The coronavirus pandemic has sent global markets into turmoil and the detrimental impact on the global economy continues to evolve at an unprecedented speed. Global supply chains have been disrupted, local economies have been wrecked by businesses collapsing, and millions have lost their jobs, according to a message UNB received from her office on Monday.
International Consensus
Dutch Minister for Foreign Trade and Development Cooperation Sigrid Kaag conveyed to Foreign Minister AK Abdul Momen that the Dutch government would ensure that the RMG value chain would not be disrupted. The Netherlands has assured Bangladesh that the Dutch buyers will not cancel or suspend their orders from the Bangladeshi readymade garment factories. However, an official at Bangladesh Garment Manufacturers and Exporters Association (BGMEA) told UNB that the Dutch brands have already cancelled orders worth US$ 192.57 million. “We need to build a consensus internationally that this is not perfect business practice from the international brands and buyers during this crisis,” Dr Nazneen said. She said Bangladesh Missions abroad, especially in the European countries and the USA, have a role to play in bringing the issues in discussion. The BGMEA, BKMEA, the government and Bangladesh missions abroad will have to campaign so that the demand for Bangladeshi products goes up protecting workers rights and owners’ investment made so far. Bangladesh readymade garment industry helps earn around 83 percent of the export earnings that the country count annually. Bangladesh was eyeing to earn US$ 50 billion through exporting apparel products which is now more than $32 billion every year. The government of Bangladesh has announced a $588 million stimulus package for the RMG sector to pay wages which employs more than four million workers, mostly women.
